Summary of "Good to Great"

Summary of Good to Great by Jim Collins

The following is a book summary of Good to Great by Jim Collins. This summary is pulled from Richard Wilson's book entitled Rainmaker which is online at www.Lulu.com/RichardCWilson. It is a great book, if you like this summer please buy it.

Jim Collins states in his book Good to Great that “almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the framework of ideas found and used by Good to Great companies.” The book touches on the following themes, which were found throughout companies that have gone from good to great:

Good is the Enemy of Great

This idea is similar to the “good is never enough” concept from Built to Last. In this section of the book, Collins urges companies to focus equally on what to do, what not to do, and what to stop doing. He believes that most companies focus too much on what to do and ignore what not to do or what they should stop doing. What are you doing based on tradition or industry standards? What assumptions or processes have you rested on because they were “good enough?” Good should be viewed as horrible because neither “great”.

Level 5 Leadership

This term “Level 5 Leadership” is used to describe a certain type of leader who was seen among many of the companies, which made the leap from good to great. They were more than just “clock builders”, they had unique characteristics such as humility and professional will towards excellence. This type of a leader is known for taking credit for bad performance while giving credit to others when things go well.

First Who… Then What

Collins says, “People are not your most important asset. The right people are.” He uses the analogy of a bus driver to while describing how to create a winning team within your organization. He recommends that you first get the right people on the bus, and then you get the wrong people off the bus, then the right people in the right seats, and then figure out where you want to drive that bus. Hire people with characteristics you cannot easily instill. Focus on who you are paying, not how. He also recommends analyzing someone’s character, work ethic, intelligence, and dedication to their values before deeply analyzing credentials and practical skills.

Confront the Brutal Facts

Collins found that companies that made the leap from good to great, had a consistent belief in their ability to succeed in the end. He believes that if companies do their due diligence and gather all of the facts, the right path will often unfold in front of them. He recommends the following four ways to build a culture where the truth is always heard:

Lead with questions, not answers. Engage in dialogue and debate, not coercion. Conduct autopsies without blame. Build “red flag” mechanisms for turning information into information that cannot be ignored. The Hedgehog Concept

Every morning the fox wakes up and starts crafting elaborate plans on how it will finally catch it’s nemesis, the hedgehog. It uses creative strategies, combining old ideas and trying to catch the hedgehog off guard. Yet every time the fox approaches the hedgehog, the small animal simply rolls up into a ball and waits until the fox leaves it alone. It does this on a daily basis, without fail. If it tried to run or use one of the fox’s tactics it would die, however it can consistently rely on it’s hedgehog strategy to save it’s hide and move forward with it’s life.

Your company’s hedgehog concept is the “one big thing” for your organization to understand and stick to. What does or can your organization do, understand, or use as your core solution to competitive threats and changes in the industry? The concept itself is similar to your core ideology (which never changes), differing only in the sense that it can be slightly less permanent. Your hedgehog concept must be something you are deeply passionate about, best at in the world, and are able to make a profit by doing. Figure out what falls into all three of these categories, and obtain an understanding and strategy based on it.

“Behold the turtle; he makes progress only when he sticks his neck out.”

– James Bryant Conant

A Culture of Discipline

Hire people who are disciplined in their own right. The second you need to manage someone, you have made a hiring mistake. Manage systems, not people. Collins believes this is superior to managing people because:

When you have disciplined people, you do not need hierarchy. When you have disciplined thought, you do not need bureaucracy. When you have disciplined action, you do not need excessive controls. The Flywheel Concept

A flywheel takes relentless pushing to get it to turn over even once, but after a while of pushing in the same direction it starts to gain momentum until it is a very powerful force. Collins contends that “Good to Great” transformations never happen all at once. They are the result of years of persistence. It might look dramatic and revolutionary from the outside, but on the inside it is more of an organic development process.

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